The evolution of Elliott Bay Book Co.

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It was 1973, and Walter Carr had a dream. He wanted his own enterprise. He wanted to own a bookstore. He had grown up in San Francisco, and knew City Lights Bookstore in North Beach, a beacon of books and literature in a picturesque old neighborhood close to a bay.

He considered Seattle, and like others eyeing opportunity here found that Seattle’s population was just as educated as San Francisco’s, similarly prosperous, but living in a less crowded and more accessible town. He had lunch at Ivar’s with a friend, walked around the historic old Pioneer Square neighborhood, sat down in the Grand Central Bakery and looked across the street at the old Globe Building. He called the landlord.

That is how TheElliott Bay Book Co., one of the country’s most loved and revered bookstores, was born.

Elliott Bay celebrates its 40th anniversary this month. Carr, its first owner, and Peter Aaron, its current one, know more than anyone what an improbable anniversary it is. Elliott Bay has survived two recessions, chain bookstores, e-books and a move from its beloved Pioneer Square location to Capitol Hill, a risky maneuver that both Carr and Aaron agree has been Elliott Bay’s salvation.

There have been many watershed moments, such as the day Rick Simonson turned up, holding onto a garbage can from the nearby restaurant where he worked. He had just finished high school, and he poked his head in and said, “Oh, this is great, I love books,” Carr remembers.

Simonson is still at Elliott Bay as head buyer and events coordinator — he’s an international authority on books and authors and a National Book Award judge. From the moment he went to work there, Simonson agitated and pushed for more and more author readings, and now the store holds 500 author events a year at the store and other venues around the city.

Other milestones have marked harder times. Carr was at his wits’ end when he sold the store to developer Ron Sher in 1999. Elliott Bay was being battered by chain bookstores like Borders and Barnes & Noble, which had proliferated around the city like mushrooms.

“I was running out of answers. With the arrival of the bookstore chains, the birth of Amazon, just blocks from us … Our best year was in 1993; our sales went down over a third over the next five years,” Carr remembers.

Carr sold the store to Sher, who eventually turned around and sold it to Peter Aaron, one of Sher’s employees. Then Aaron had to engineer the unimaginable — the 2010 move out of the old Globe building to Capitol Hill.

Aaron’s struggle was to retain the same feeling as the old store, with its creaky wood floors and warrens — “the space, the bookshelves, the brick, the way it seemed to go on and on and fold into treasure trove after treasure trove,” he remembers. He had to hang onto the loyal customers who drove or bussed to the Pioneer Square location, and attract new neighborhood customers.

He says it’s working; the Capitol Hill population is dense, diverse and committed to the store. “I have just seen the neighborhood get better and better and better, stronger and stronger,” he says. Carr started with a couple of thousand titles. Aaron now stocks 160,000.

Borders is gone, and Barnes & Noble is struggling.

“I wish I could say it (the move) was a matter of savvy,” says Aaron, “but it was a matter of being lucky.”